Getting a Mortgage on a Listed Building: What You Need to Know

Listed buildings are characterised by historic charm and specialist importance, and so securing a listed property as your home is a dream scenario for many.

So how can you get a mortgage on a listed building?

Whether you’re looking to secure a mortgage on a grade I listed building or a grade II listed building, lenders will often have a much stricter criteria, and require additional details on affordability and planning, before approving a mortgage for a listed building.

In this article, we’ll cover everything you need to know about getting a mortgage on a listed building, including how the grading system, lender assessments, and the best practices to improve your chances of approval. Let’s begin.

What Is a Listed Building and How Do the Grades Work?

A listed building is a property that is recognised for its architectural or historical significance. They are protected by law and are listed on the National Heritage List for England, categorised into grades, based on their importance.

Listed buildings are classified into 3 categories or “grades”:

You may have noticed that there are no “grade 3 listed buildings”. This is because grade 3 or grade III is not an official classification in England. Instead, Grade II and Grade II* are two distinct categories within this system.

Knowing the distinctions between grades is important, as they will often determine the specific lending criteria and risk assessment. Understanding these grades will help you know what to expect in regards to restrictions and mortgage considerations.

At Boon Brokers, our dedicated mortgage advisers offer fee-free expert guidance, helping you explore lender options for various grades of listed buildings, so you can navigate the mortgage process with clarity and confidence.

Can You Get a Mortgage on a Listed Building in the UK?

Yes, it is possible to secure a mortgage on a listed building in the UK, however, lenders will generally view listed buildings as higher risk properties, due to restrictions on alterations and potential maintenance costs.

The grade of a listed property can significantly influence how lenders assess risk and structure their offers. Working with a specialist lender can often provide a more flexible lending criteria that is more aligned with the unique challenges of listed buildings.

Below, we take a closer look at exactly what you can expect when securing a mortgage based on the building’s listed grade:

Getting a Mortgage On a Grade I Listed Buildings

While securing a mortgage for a Grade I listed building is a lovely thought, in reality it is highly unlikely. This is because grade I listed buildings are typically categorised as the most historically important properties in the country, often including iconic landmarks like Buckingham Palace and the Palace of Westminster.

As such, it is very (very) difficult to find a lender that will approve any mortgage for a grade I listed building, due to their exceptional national or historical significance.

Getting a Mortgage On a Grade II* Listed Buildings

While not as rare as Grade I properties, securing a mortgage on a Grade II* listed building can still prove to be a bit of a challenge. These buildings often include historic manor houses, churches, or architecturally unique homes and will have stipulations in place about their careful preservation.

Getting a Mortgage On a Grade II Listed Buildings

Grade II listed buildings are the most common type of listed buildings. While these buildings will often have structures of historical and architectural value, it is much more achievable to secure a mortgage on a grade II listed property.

That said, lenders will still carry out a thorough assessment before approving a mortgage on a Grade II listed property. From structural conditions to planning constraints, these checks help them determine the level of risk involved.

At Boon Brokers, our dedicated mortgage advisers can help you secure a mortgage on a listed building. With whole-of-market access, we can help match your mortgage needs on a listed building with a lender that is perfect for you. Our expert advisers will help you every step of the way, helping you secure the best mortgage rates and terms tailored to your unique needs.

Let’s jump into some of the key factors that lenders will assess when reviewing a mortgage application for a listed property.

What Will the Lender Check When Assessing a Listed Building Mortgage?

When submitting a mortgage application for a listed building, lenders will want to assess and have proof of a variety of different factors. Each of these checks will aim to conclude the property’s current condition, construction, legal status, and insurability. Key considerations will include:

• Condition of the Property

First, lenders will want to assess the overall state of the property in question. This will include a property survey that will look for any structural issues, including damp, subsidence, or rot, which could affect the long-term viability and saleability of the building.

• Construction Materials

Due to the historical age or architecture, many listed buildings may have different materials used for their structural integrity, other than timber frames or lime mortar. Lenders will consider how these materials impact the property’s durability and potential repair costs.

• Planning and Consent

Legal factors such as listed building consent and planning permission for past or planned works are critical. Without the correct permissions, the property could face costly remedial work or reversal of changes, which could impact the property’s value and make it more difficult to sell the property in the future. As such, lenders will prefer to minimise the risk of unforeseen legal or financial issues.

• Insurance

Home insurance for listed buildings is usually required before a lender will grant a mortgage. This helps provide a financial safeguard and can cover specialist repairs that may be required for the unique needs of a listed property.

• Title Covenants

Lenders will also check for any restrictive covenants on the property’s title. Here, the only significant concern for lenders is if there are restrictive clauses that could limit the property’s use or future alterations, as this would potentially increase their overall risk.

While each lender will carry out their own individual assessments and criteria, this general structured approach will help lenders manage the unique risks associated with listed buildings.

If you’re unsure about what your chosen lenders will look for, or how to prepare your application, Boon Brokers’ can help you.  We offer impartial, whole-of-market advice, and can guide you through the entire process – from start to finish – to improve your chances of securing the mortgage that suits your needs.

Do You Need Listed Building Permission to Renovate?

Making any alterations to a listed property can be complex and will often require formal permission known as listed building consent. This consent is necessary for any work that might affect the building’s character, both externally and internally.

If you’re planning on securing a mortgage on a listed building with the plan of expanding through an extension(s), such as building a conservatory or creating additional rooms, then you will need to obtain approval first. This approval will often also be dictated on any extension aligning with the property’s current architectural or historic nature.

As such, replacing windows in a listed building will typically require specialist repairs or accurate replicas of the original style. Additionally, internal changes such as moving walls, removing fireplaces, or altering original features are also subject to consent, reflecting the need to preserve the building’s heritage.

What Are the Common Risks of Buying a Listed Building?

Buying a listed building will bring unique responsibilities and risks that typically go beyond a standard property purchase and mortgage. In fact, beyond the usual concerns of a property purchase, listed buildings are often seen as more silicate and demanding to maintain. Buyers will need to consider:

• Limited Lender Options

Listed buildings come with unique risks and not all lenders are comfortable with offering mortgages to properties with the associated risks and restrictions. As such, your choice of lenders may be more limited when securing a mortgage for a listed building.

• Higher Deposit Requirements

Due to the increased risk, lenders may ask for an initial larger deposit. This can sometimes be 20 – 25% or more, depending on your chosen lender, and is purposed to help offset the perceived risks related to repair costs and marketability of a listed property.

• Increased Maintenance and Repair Costs

The costs of maintaining  a listed property will typically be much higher and will often require specialist craftsmanship and authentic materials. This added expense will increase the risk for both buyer and lender in the event of structural damage or saleability.

• Strict Planning and Consent Regulations

Due to the architectural and historical values of listed buildings, any repairs, alterations, or extensions require listed building consent. This can be both a time-consuming and costly legality to obtain.

• Resale Complications

The niche market for listed buildings may mean it will take longer to sell the property, or that you may need to accept a lower price compared to similar non-listed homes.

• Insurance Challenges

Due to the unique structural repairs and specialist costs, insurance premiums for listed properties tend to be higher.

Understanding these risks fully will help you make an informed decision on whether purchasing a listed building is the right decision for you. It goes without saying that the charm and character of such homes is hypnotising. However, it is crucial that you consider both the financial and legal commitments involved in owning a listed property.

At Boon Brokers, our experienced mortgage advisers will provide you with fee-free mortgage advice that can help you assess these risks in relation to your financial situation, matching you with a lender that understands your needs.

What Deposit and Rates Do You Need for a Listed Building?

Lenders may ask for a larger deposit for a listed building, but it likely won’t have anything to do with the Grade II status. In fact, the lender’s concerns are likely to be around non-standard construction and ongoing maintenance costs.

The deposit amount will vary depending on the lender’s risk assessment, but it’s common to see loan-to-value (LTV) restrictions if the property includes materials or construction methods that fall outside standard-construction criteria.

While it’s often assumed that mortgage rates are higher for listed buildings, this isn’t always the case. In reality, mortgage rates are largely determined by affordability, your credit profile, and the lender’s overall risk appetite – rather than the listed status of the property itself.

That said, fewer lenders are willing to offer mortgages on listed buildings, which can limit your access to the most competitive deals.

In short: Due to the unique historical or architectural construction, listed buildings can often be seen by lenders as higher-risk properties. As such, it is important to compare a wide-range of lender offers and seek professional guidance to secure the best rates.

At Boon Brokers, our expert mortgage advisers can help you compare lenders from a whole-of-market panel, including leading banks and specialist lenders alike. We can help you find a lender that matches your mortgage needs, giving you access to competitive terms that are tailored to your unique circumstances

How to Improve Your Chances of Getting a Mortgage on a Listed Building

Working with a trusted and regulated whole-of-market mortgage broker will greatly improve your chances of securing a mortgage on a listed building. Whole-of-market mortgage brokers can connect you with lenders who understand the unique challenges of listed buildings and guide you through every step of the mortgage application process.

As a general rule, lenders will be much more likely to approve applications where borrowers demonstrate clear financial affordability and a budget plan for the upkeep of their listed property. Providing evidence of this foresight will help reduce the perceived risks and can bolster the reliability of financial profile.

Here are the top tips that can help your chances of getting a mortgage on a listed building:

At Boon Brokers, our specialist advisers have deep knowledge of listed buildings and can support you at every step. From surveys to insurance and lender selection, we can help you secure the mortgage deal that best suits your financial situation.

Should You Use a High Street Lender or a Specialist Mortgage Broker?

Listed buildings come with unique construction features, regulatory requirements, and potential restrictions that buyers must carefully consider. While some high street lenders may offer mortgages for some listed properties, they will most likely apply stricter eligibility criteria or have limited product options.

In contrast, working with a trusted, whole-of-market mortgage broker can provide you with access to a wider panel of lenders, including those with experience in heritage homes.

At Boon Brokers, we offer fee-free, whole-of-market mortgage advice tailored to your circumstances. Whether you’re purchasing a Grade II listed cottage or a unique period property, our expert team is here to help you find competitive mortgage deals that suit your needs.

Contact Boon Brokers today and begin your homeowner journey with dedicated support, clear guidance, and a stress-free route to owning your listed building.